Relief Granted for ITC on FY 2018-19 Due to Finance Act, 2024 Amendment

Case Title: Arunas Snack Product vs. State of Assam & Others
Court: Gauhati High Court
Petition Number: WP(C)/2851/2024
Date of Judgement: 27.01.2025
Category of Dispute: Input Tax Credit
Relevant Section: Section 16(5) of CGST Act, 2017 (as amended by Finance (No. 2) Act, 2024)
Bench: Hon’ble Chief Justice Mr. Vijay Bishnoi, Hon’ble Mr. Justice Kaushik Goswami

📝 Facts of the Case

[Para 1-2]:

• The petitioner, Arunas Snack Product, claimed ITC based on invoices for the FY 2018-19.

• The input tax credit was denied earlier due to time bar under Section 16(4) of the CGST Act.

• However, the Finance (No. 2) Act, 2024 introduced sub-section (5) in Section 16, which allows such ITC if the return was filed before 30.11.2021.

• The petitioner had indeed filed such return before the cutoff date.

❓ Question(s) in Consideration

[Para 3]:

• Whether the petitioner is entitled to avail ITC for FY 2018-19 in light of the newly inserted Section 16(5) of the CGST Act?

• Whether any coercive action can be taken under the previously passed order dated 01.01.2024?

👩‍⚖️ Observations of the Court

[Para 4-5]:

• The Court took note of the Finance (No. 2) Act, 2024 which inserted sub-section (5) in Section 16 of the CGST Act.

• As per the amended provision, ITC for FYs 2017-18 to 2020-21 can be claimed if the return was filed by 30.11.2021.

• The petitioner’s return for FY 2018-19 was filed within this window.

• Hence, their case falls squarely within the amended statutory provision.

🏛️ Judgement of the Court

[Para 6-7]:

• The respondent authorities were directed to reconsider the petitioner’s case under the amended Section 16(5).

• It was clarified that no coercive action shall be taken against the petitioner in furtherance of the earlier order dated 01.01.2024.

• The writ petition was disposed of with these directions.

✅ Between Fine Lines (Simple Summary in 5 Lines)

1. Petitioner claimed ITC for FY 2018-19 but was initially denied due to time bar.

2. A new provision in the CGST Act (Section 16(5)) now allows such claims filed before 30.11.2021.

3. The petitioner met this condition.

4. Court directed authorities to reconsider ITC eligibility as per the new law.

5. No coercive recovery can be made based on the earlier order.

📚 Summary of Referred Cases

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